Valdosta Daily Times

Local News

April 11, 2013

Obama budget: Spending cuts, higher smokers’ taxes

WASHINGTON — Mixing modest curbs on spending with tax increases reviled by Republicans, President Barack Obama proposed a $3.8 trillion budget on Wednesday that would raise taxes on smokers and wealthy Americans and trim Social Security benefits for millions.

Obama’s 2014 blueprint combines a $242 billion infusion of new spending for road and rail projects, early education and jobs initiatives — all favored by Democrats — with longer-term savings from programs including Medicare and the military. It promises at least a start in cutting huge annual federal deficits.

The president pitched his plan as a good-faith offer to his GOP rivals since it incorporates a proposal he made to Republicans in December that wasn’t radically different from a GOP plan drafted by House Speaker John Boehner. But it follows January’s bitterly fought 10-year, $600 billion-plus tax increase that has stiffened GOP resolve against further tax hikes.

“I have already met Republicans more than halfway, so in the coming days and weeks I hope that Republicans will come forward and demonstrate that they’re really as serious about the deficit and debt as they claim to be,” Obama said.

After four years of trillion-dollar-plus deficits in his first term, Obama’s plan projects a $973 billion deficit for the current budget year and red ink of $744 billion for the 2014 fiscal year starting in October. By 2016, the deficit is seen as dropping below 3 percent of the size of the economy, a level that many economists say is manageable.

Obama cast his budget as a compromise offer that would bridge differences between Republicans and their desire for reducing government spending and Democrats who want more revenue from taxpayers.  But it’s difficult to overstate the gulf between Obama and the conservatives who are in the GOP driver’s seat in Congress.

While the budget proposal will not prompt any immediate congressional action, it will probably surface this summer when Republicans are expected to demand additional reductions in the deficit in exchange for increasing the nation’s borrowing authority.

Obama claims $1.8 trillion in deficit savings over the coming decade, but the budget tables show the savings are actually $1.4 trillion. And $1.2 trillion of that is devoted to reversing automatic, across-the-board spending cuts required because of Washington’s inability to follow up a 2011 budget pact with further deficit action.

“This is worse than a status quo budget,” said House Budget committee Chairman Paul Ryan, R-Wis. He said it has about $1 trillion in new taxes, $1 trillion in new spending with deficit reduction of only $119 billion over 10 years under GOP math that sorts through interpretations employed by the White House that could be open to question.

For instance, Obama claims $167 billion in lower war costs — money the administration never intended to spend — and uses that “savings” for road projects and other undertakings it bills as jobs initiatives.

The real cuts include $400 billion scrubbed from health care programs like Medicare over the coming decade, including cuts in payments to drug companies and higher Medicare premiums for people who are better off.

The administration would modestly cut the annual operating budgets for both the Pentagon and domestic agencies while reprising ideas like higher Transportation Security Administration fees on airline tickets, the end of Saturday mail delivery and higher pension contributions for federal workers.

“He does deserve some credit for some incremental entitlement reforms,” said Boehner, R-Ohio. “But I would hope that he would not hold hostage these modest reforms for his demand for bigger tax hikes. Listen, why don’t we do what we can agree to do?”

That’s not the way it works, countered Gene Sperling, the director of Obama’s National Economic Council. “The offer that is there for Speaker Boehner is not an a la carte menu.”

The White House budget claims $580 billion in tax increases on the wealthy over 10 years, including a 28 percent cap on itemized deductions that’s never gotten anywhere on Capitol Hill.

The total climbs closer to $1 trillion in tax increases after adding in ideas like a 94 cents-per-pack increase in taxes on cigarettes, changes for corporate foreign earnings, slower inflation adjustments to income tax brackets, elimination of oil and gas production subsidies, an increase in the estate tax, a new “financial crisis responsibility” fee on banks and new taxes on trading of exotic financial instruments known as derivatives.

Republicans predictably slammed Obama’s plan for its tax increases while his Democratic allies generally held their tongues over cuts to Social Security benefits.

1
Text Only
Local News
  • EOM July 2014.jpg Sgt. Jonathan Yeargin Honored as July 2014 Employee of the Month

    Valdosta Mayor John Gayle and Fire Chief Freddie Broome honored Jonathan Yeargin as the July 2014 Employee of the Month at the July 10 City Council meeting.

    July 23, 2014 1 Photo

  • Clay Griner.jpeg Griner wins Lowndes commission runoff

    A long nine-week runoff election between Clay Griner and G. Norman Bennett came to an end Tuesday night with Griner beating Bennett by 1,060 votes, with approximately 70 provisional ballots left to count.

    July 23, 2014 1 Photo

  • 20140722-Runoff_Voting003.jpg State Senate District 8 too close to call

    The race for State Senate District 8 appeared too close to call as of The Times print deadline late Tuesday night.

    July 23, 2014 1 Photo

  • Senate Georgia_Stew.jpg Perdue defeats Kingston in Georgia Senate runoff

    Businessman David Perdue has defeated longtime Rep. Jack Kingston in the Republican runoff for Georgia’s U.S. Senate nomination, setting up a matchup against Democratic nominee Michelle Nunn that will help determine which party controls the Senate for the final years of the Obama administration.

    July 23, 2014 1 Photo

  • County OKs $1.6 million for water-treatment equipment

    By a divided vote, the Lowndes County Commission approved spending $1,638,000 to purchase two pieces of equipment to improve the county’s water quality as per an agreement with the federal Environmental Protection Agency.

    July 23, 2014

  • Baytree Animal Hospital LB copy.JPG Animal hospital named Business of the Week

    Baytree Animal Hospital was named Leading Business of the Week by the  Valdosta-Lowndes Chamber of Commerce for July 14.

    July 22, 2014 1 Photo

  • Gavel-courtroom.jpg Water treatment plant discussed

    The Lowndes County Board of Commissioners discussed purchasing two pieces of equipment for the Alapaha Water Treatment Plant and the Spring Creek System for a total of $1,638,000 during its Monday work session and is expected to vote on the issue tonight.

    July 22, 2014 1 Photo

  • education.jpg Charter school petition denied

    Both the Valdosta City and Lowndes County school boards unanimously denied the joint charter petition from Scintilla Charter Academy during their respective meetings Monday evening.

    July 22, 2014 1 Photo

  • echols_alapapa.jpg WWALS gets grant from river network

    The Willacoochee, Withlacoochee, Alapaha, and Little River Systems Watershed Coalition, Inc. (WWALS) received a $500 Alapaha Water Trail Grant from the Georgia River Network

    July 21, 2014 1 Photo

  • 140718-ARJim2.jpg Teacher at home anywhere in the world

    Variety is the spice of life. South Georgia is home to a diverse group of people, each with a unique life story. One man with glorious tales of travel and selfless volunteer work is Jim Kokoruda.

    July 21, 2014 1 Photo

Top News
Poll

School starts again in about two weeks. What do you think?

It's still summer. School starts too soon.
Seems like the right time to return.
Abolish summer recess. Make school year-round.
     View Results